Editorial: Obamacare means more money

2013-03-28 16:26:07

Three years after passage and about nine months before it takes full effect, reviews are in on the Affordable Care Act. In some cases, reviewers come close to flunking Obamacare. The prognosis, say many, doesn't look promising, and could get worse.

A recent Manhattan Institute study used a report-card format to measure how well the law has reduced costs. "[W]e give Obamacare's cost-cutting efforts a grade C," with the notation: "Weak evidence that reforms will achieve their intended goals or growing evidence of unintended consequences."

Also, "based on analysis of the available data, we project that Obamacare will increase U.S. health care spending and will not lower health care costs," concluded the study's authors.

Meanwhile, less-formal critiques accumulate. Health insurers, reported the Wall Street Journal, are "privately warning brokers" that individual and small-business premiums could "increase sharply next year." "[R]ates could more than double for some consumers buying their own plans."

This conflicts with administration assurances that the law will "make health care coverage more affordable and accessible."

Repercussions are felt throughout provider networks. "The days of doctor-owned medical practices are probably over now that the Affordable Care Act increases the costs for doctors to practice individually," according to the National Center for Policy Analysis.

By next year, it is estimated half of U.S. doctors will work in hospitals, a 75 percent increase since 2000. Scott Gottlieb of the American Enterprise Institute says that trend reduces quality of care and productivity. Doctors remaining independent will be mandated to install expensive information technology systems.

Obamacare's disruption of the market already is resulting in doctors shedding insurance altogether. Instead, doctors charge for services from price lists, and can charge less because they avoid costs of coding, collecting and billing third-party insurers. In some cases, costs are dramatically less, such as $50, rather than $200, to treat an ingrown toenail.

A 2011 survey found 30 percent of employers would "definitely or probably" drop insurance after 2014, when Obamacare's main provisions are implemented. But of firms that said they fully understood the law, 50 percent said they would drop coverage, despite a fine for doing so of $2,000 per worker.

The Congressional Budget Office already predicts the law will lead to consumers buying more-expensive plans, largely because it requires certain benefits and limits charges such as deductibles, says Anna Wilde Mathews in the Wall Street Journal.

College students soon also may grade Obamacare, which mandates coverage costing from a few hundred dollars to $1,700 a year, according to Alieta Eck, MD, founder of the Zarephath Health Center free clinic for the poor and uninsured in New Jersey.

The ultimate grade for Obamacare may come from the public. A recent Rasmussen poll found 54 percent of those surveyed said the law will damage the health care system.

The challenge for Congress is to scale back Obamacare's harmful effects, despite a president unlikely to sign bills that reduce the law's scope. That will be a tough grade to make.